About

Finance Homework

1. The U.S. financial system is composed of (1) policy makers (2) a monetary system (3) financial institutions and (4) financial markets. Indicate which of these components is associated with each of the following roles: A. Accumulate and lend/invest savings (3)

3. In business ethical dilemnas or situations occur frequently. Laws and regulations exist to define what unethical behavior is. However the practicing of high quality ethical behavior often goes beyond just meeting laws and regulations. Indicate how you would respond to the following situations.

a. Your boss had just told you that tomorrow the Federal Drug Administration will announce its approval of your firm’s marketing of a new breakthrough drug. As a result of this information you are considering purchasing shares of stock in your firm this afternoon. What would you do? I would not purchase stock because it is unethical to get information from an inside the company. This will be an advantage to seeking personal gain through the inappropriate of non public information or abusing my position in the company and should be purchase only after it is know to the public. This is called insider trading. This is a direct potential violation of federal securities laws.

b. In the past your firm has been in compliance with regulatory standards relating to product safety. However you have heard through the company grapevine that recently some of your firm’s products have...

You May Also Find These Documents Helpful

...﻿
International Finance: Walt Disney Company
International Finance: Walt Disney Company
International finance deals with financial management between domestic and foreign countries. Investors and international businesses must evaluate and oversee international risks. The Walt Disney Company is based out of the United States, but has successfully expanded their business to many different locations across the globe. The following paper will explain how the global investment banking process has assisted The Walt Disney Company, how regulatory bodies affected their financial decision making, and finally will identify and evaluate contemporary issues in international financial management.
Background Information
For more than 90 years, The Walt Disney Company has been at the forefront of family entertainment. They provide quality entertainment for every member of the family, across America and around the world ("Walt Disney International", 2009). They even have a specific department for all of their international business, Walt Disney International (WDI). “Their responsibilities range from providing administrative support and coordination for Disney’s global offices to increasing the globalization of the Disney brand to ensure that it is locally relevant to consumers around the world, ("Walt Disney International", 2009, para. 1). The Walt Disney Company has an international presence on all seven continents. They have five...

...
Introduction - Types Of Financial Institutions And Their Roles
A financial institution is an establishment that conducts financial transactions such as investments, loans and deposits. Almost everyone deals with financial institutions on a regular basis. Everything from depositing money to taking out loans and exchanging currencies must be done through financial institutions. Here is an overview of some of the major categories of financial institutions and their roles in the financial system.Commercial BanksCommercial banks accept deposits and provide security and convenience to their customers. Part of the original purpose of banks was to offer customers safe keeping for their money. By keeping physical cash at home or in a wallet, there are risks of loss due to theft and accidents, not to mention the loss of possible income from interest. With banks, consumers no longer need to keep large amounts of currency on hand; transactions can be handled with checks, debit cards or credit cards, instead.Commercial banks also make loans that individuals and businesses use to buy goods or expand business operations, which in turn leads to more deposited funds that make their way to banks. If banks can lend money at a higher interest rate than they have to pay for funds and operating costs, they make money.Banks also serve often under-appreciated roles as payment agents within a country and between nations. Not only do banks issue debit cards that allow account holders to pay for...

...financing with a portfolio of currencies.


20 - 2
Sources of Short-Term Financing
• Euronotes are unsecured debt securities
with typical maturities of 1, 3 or 6 months. They are underwritten by commercial banks.
• MNCs may also issue Euro-commercial
papers to obtain short-term financing.
• MNCs utilize direct Eurobank loans to
maintain a relationship with Eurobanks too.
20 - 3
Internal Financing by MNCs
• Before an MNC’s parent or subsidiary
searches for outside funding, it should determine if any internal funds are available.
• Parents of MNCs may also raise funds by
increasing their markups on the supplies that they send to their subsidiaries.
20 - 4
Why MNCs Consider Foreign Financing
• An MNC may finance in a foreign currency
to offset a net receivables position in that foreign currency.
• An MNC may also consider borrowing
foreign currencies when the interest rates on such currencies are attractive, so as to reduce financing costs.
20 - 5
Short-Term Interest Rates
as of February 2004
20 - 6
Determining the Effective Financing Rate
The actual cost of financing depends on
 the interest rate on the loan, and  the movement in the value of the
borrowed currency over the life of the loan.
20 - 7
Determining the Effective Financing Rate
At time t 1. Borrows NZ$1,000,000 at 8.00% for 1 year Exchange rate = $0.50/NZ$ 2. Converts to $500,000 What is the effective financing rate? $648k...

...International Finance Paper
Many companies today have decided to take their business into the international marketplace. Costco is a company that has successfully entered the international marketplace with warehouses in several countries around the world. When Costco opened warehouses international it had to take into consideration Global banking and the risk it would have with the different exchange rates. Another issue that also had to be taken into consideration would be the different regulations that each country brings with it. Team B has taken a look at all issues and will show how they affect Costco.
Global Investment Banking Process
Costco opened their first store in 1976 in San Diego, California and became incorporated in 1983 after merging with The Price Company. Today the organization operates 557 warehouses which includes 406 of these warehouses in the United States and Puerto Rico, 77 in Canada, 21 in the United Kingdom, seven in Korea, six in Taiwan, nine in Japan and another 31 warehouses in Mexico (Costco Wholesale, 2009).
Costco is a dominant club operator in many countries and have locations not only in the United States but they operate in nine Canadian Provinces, Puerto Rico, Mexico, United Kingdom, Japan, Korea, Taiwan and in the near future Australia. The Taiwan locations are through a 55%-owned subsidiary and the Japan and Mexico locations are through a 50%-owned joint venture (Costco Wholesale, 2009).
Costco was able to...

...﻿
Issues
1. Explain why an individual investor might want to invest in an international growth fund?
2. Describe the risk associated with making an investment in an international growth fund. Identify the risks that would be common to domestic an international funds, and those risk that would be unique to an international fund.
3. Discuss how the fact that foreign companies are not subject to the same accounting, auditing, and financial reporting standards and practices as U.S. companies poses a risk not typically encountered when investigating in the stock of U.S. companies.
4. Consider the allocation of funds assets by region. Speculate as to why the portions of fund assets are distributed in this manner.
5. Consider the country diversification of funds assets. Identify the countries in which the funds in most heavily invested. Speculate as to why this might be the case. Are there any countries in which you would have expected the fund to be more heavily invested than it is? Are there any countries in which you would have expected the fund to be invested and it is not?
6. Consider the sector diversification of funds assets. Identify the sectors in which the fund is most heavily invested. Speculate as to why this might be the case.
Facts
The Vanguard International Growth Fund is one of the 13 international funds that concentrate on investment in non-U.S. stocks and bonds. The target is in companies that are emerging in Europe, the Far East, and Latin...

...of speculation. Characteristics of Sukuk is that the face value of Sukuk is based on the market value of the fundamental asset whereas the face values of a bond price is based on the issuer’s credit worthiness. In the secondary market, the sale of Sukuk means to sell an asset possession but selling a bond means selling a debt.
Sukuk also issued with specific maturity dates where upon maturity the Sukuk issuer buys the back. Initial investment in Sukuk is not guaranteed menas Sukuk investors can or cannot get back the entire face value amount as they also share the risks of the underlying asset. If there is an event of defaults or failure to perform, Sukuk investors must bear a share of loss after all it is fair and share in Islamic Finance
ii. Considering Sukuk as a potential means of Islamic investment in the modern economic system, explain an issue that is facing the Islamic bond market?
By considering Sukuk as a potential means of Islamic investment in the modern economic system, there are several issue that faced in the Islamic bond market. Based on the text, the issue that occured is where Malaysia is among the few countries in the world that mandatory Sukuk and other debt papers to be rated. While corporate bond ratings are compulsory. Government and Government guaranteed debts are exempted for the domestic bond issuance. There are two credit rating agencies in the country that provide such services, the Malaysian Rating Corporation Berhad...

...Research Spotlight on Homework
NEA Reviews of the Research on Best Practices in Education
Some researchers are urging schools to take a fresh look at homework and its potential for engaging students and improving student performance. The key, they say, is to take into account grade-specific and developmental factors when determining the amount and kind of homework. So, what's appropriate? What benefits can be expected? What makes for good homework policies? Research doesn't have all the answers, but a review of some existing data yields some helpful observations and guidance.
How Much Homework Do Students Do?
Survey data and anecdotal evidence show that some students spend hours nightly doing homework. Homework overload is the exception rather than the norm; however, according to research from the Brookings Institution and the Rand Corporation (see the Brown Center 2003 below). Their researchers analyzed data from a variety of sources and concluded that the majority of U.S. students spend less than an hour a day on homework, regardless of grade level, and this has held true for most of the past 50 years. In the last 20 years, homework has increased only in the lower grade levels, and this increase is associated with neutral (and sometimes negative) effects on student achievement.
How Much Is Appropriate?
The National PTA recommendations...

...﻿
INTERNATIONAL FINNACE:
International Finance is an area of financial economics that deals with monetary interactions between two or more countries, concerning itself with topics such as currency exchange rates, international monetary systems, foreign direct investment, and issues of international financial management including political risk and foreign exchange risk inherent in managing multinational corporations.
OR
International finance is the branch of economics that studies the dynamics of exchange rates, foreign investment, and how these affect international trade.
OR
International finance (also referred to as international monetary economics or international macroeconomics) is the branch of financial economics broadly concerned with monetary and macroeconomic interrelations between two or more countries. International finance examines the dynamics of the global financial system, international monetary systems, balance of payments, exchange rates, foreign direct investment, and how these topics relate to international trade
EXPLANATION:
International macroeconomics (or international finance) as a subject covers many topical issues. What has happened (what will happen) to the dollar? Is the current account deficit too large? Should China devalue its Yuan? Should it first liberalize financial flows? Should Sweden give up its currency to join the euro? Should emerging market economies liberalize...